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How to Start a Business Overseas
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How to Start a Business Overseas

Starting a business overseas requires a lot of patience and persistence. Unless you are a native of the country, you will encounter new experiences and unexpected issues, including bureaucratic red tape. For instance, while you might be familiar with the Spanish language based on classes that you took in the U.S., regional differences exist (e.g., different Spanish vocabulary in Argentina versus in Spain). Each state in the U.S. maintains an office of the secretary of state, which typically provides guidance about how to start a business in that state. Overseas countries may or may not have similar tools.

Difficulty: Moderately ChallengingInstructions

1 Study the target market and determine if the people will buy your product or service. For instance, unlike in America, people living in major Indian cities usually do not purchase items in bulk. Consequently, you might have to alter the product into smaller or individual packaging in order to be successful. You also could open a U.S.-based franchise overseas.

2 Introduce yourself to and network with legitimate business leaders. An essential feature in starting an overseas business involves finding a trustworthy local partner. The U.S. and most other countries restrict the amount of ownership foreigners can retain. Depending on the country you enter, you likely cannot own a majority stake in the company.

3 Evaluate your competition, such as by surveying your target audience. For instance, if you are marketing a new soft drink, conduct informal or formal taste testing to gauge consumer response. Ask people about their favorite type of drink and brand. An item that is popular in the U.S. will not necessarily transfer well overseas.

4 Obtain necessary permits and licenses. Compare real estate prices, such as for office space or inventory. Realize that you might spend several months attempting to secure mandatory paperwork.

5 Establish daily operations, such as the days and hours that the business will be open. In several countries, businesses close during the day for religious or cultural reasons. For instance, during Ramadan, shops in Egypt close early unless they cater to tourists.

Tips & WarningsTo avoid making significant decisions hastily, travel to the location multiple times. Each visit should increase your exposure to the local markets. Assess political and safety risks.Realize that currency exchange rates will affect your net profits. If your overseas business accepts euros but you want U.S. dollars, you must pay transaction fees to convert the currency as well as absorb market losses (e.g., when the euro is stronger than USD).

By Maggie Gebremichael
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